Losing Sales By Overcharging For Shipping And Handling

As a serious seller on eBay you’re familiar with their fee circumventing rules. If not, then click here. http://pages.ebay.com/help/policies/listing-circumventing.html. In a nutshell their rule is that you are not allowed to put an item up for bid for a penny and charge $100 for shipping and handling (S&H) in an attempt to avoid the transaction fee.

Since we are not trying to avoid fees we all follow the rules – right? To a certain extent yes, but many sellers are still stretching the bubble by over charging for S&H in an attempt to maximize their profits and losing bidders in the process - the end result is the opposite of what they hoped for. Ultimately they reduce their sales and although these efforts fit within eBay’s policies, when extreme, they are considered an unfair practice by many buyers.

I’ll give you an example. I play in a Texas-No-Hold-Em poker game once a month - just a bunch of friends who get together, play a little poker, talk about their lives and have some fun. I thought it would be nice if we had some ‘professional-style’ poker chips so went to eBay to buy some. I like to think of myself as an intelligent eBay shopper so I watched the auctions for a few days and noticed that the final price averaged $60 for the chips I wanted (retail is about twice that at a local store). The market was determining the price, or was it?

As I watched these auctions I noticed an interesting problem, the shipping charges varied greatly. For the sake of this example let’s say one seller was offering S&H at $20, another at $30 and one $50. We’ll call them Seller A, Seller B and Seller C. As a buyer, if I was willing to accept the price determined by the market – in this case $60, then the final cost of the item from each of these sellers would be:

Seller A: $60 + $20 = $80
Seller B: $60 + $30 = $90
Seller C: $60 + $50 = $110

I did some additional homework and discovered the package would weigh 17 pounds, the size would not increase shipping costs and the sellers were all in my state. I went to the UPS and Fed-X web sites and plugged in the needed information for shipping cost estimates. The results were $11 and $17. All things being equal the total cost of the chips should be around $71-$78. So which seller’s auction did I bid on? Only one – Seller A – and I got the chips for $52, plus S&H ($72). If I hadn’t won that auction I may have bid on Seller B’s but probably would have lowered my total bid amount by $10. Seller C’s auction closed without a singe bid.

Seller A got my business, Seller B may have, and as far as I was concerned, and apparently other bidders, Seller C can go pound sand. The outcome of this example should be pretty clear and it should be obvious by now that you don’t want to be Seller C. Although you may get an occasional windfall with less savvy bidders, in the long term your sales will be much less than that of other sellers of similar items.

That’s not to say you shouldn’t recoup your shipping and handling costs in the process. We’re not in business to lose money, but make sure you are not trying to pad your ‘profit’ at the expense of loosing bidders and ultimately sales. Take the time to do similar research on your own items and market niche and find out where you stand with your shipping and handling charges. If you’re fair to your customers they will think better of you for it and in the long run your sales will be better.

About The Author

© Copyright 2005 Steven Woodward - All Rights Reserved

Steven Woodward is the owner, editor and publisher of the Auction Sellers Network (ASN); a web site for individuals and companies who are serious about utilizing the online auction marketplace for their business. In addition to topical articles, ASN provides an extensive resource center, news feeds, member forums and classified ads. For more information or to become a member please visit http://www.AuctionSellersNetwork.com.

No permission is needed to reproduce an unedited copy of this article as long the About the Author tag is left intact and included. We do request that we be informed where it is posted and reciprocal links will be considered.

This article was posted on April 04, 2005

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Online auctions are now the new gold rush on the internet.

It seems as if everyone is talking about online auctions. And why not. There are thousands of online auctions on the internet with more popping up everyday.

People love them because they can usually find great bargains. Businesses are now also seeing the benefits of online auctions.

Below are five ways your business can benefit from online auctions.

1. Get Rid Of Excess Inventory

You could sell your excess or discontinued products at an online auction. Your unsold inventory is doing you no good sitting around, collecting dust. It's an effective way to make extra income and it won't be a total loss for your business. You could even get lucky and make a profit depending on how much people will bid for. . . .
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Have you ever participated in any online auctions?

Yes, people are making piles of cash from online auctions.

And you can take advantage of this new gold rush to generate a lot of traffic to your own website.

There are thousands of online auctions on the internet.

People love them because they can usually find great bargains.

If you have an online business, you can use them to increase traffic to your web site.

You could create an electronic book or report that relates to your online business, then auction it off at an online auction.

You could increase traffic to your web site by placing an ad for your web site in the electronic publication.

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Electronic publi. . . .
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In the past decade online money-making, home-based opportunities that match a person's skills, interests, abilities, and ingenuity have become almost limitless. The purpose of this report is to show you that it's simple and easy to join the ranks of success-. . . .
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So you've been thinking of doing some internet marketing or you've done some and you're not making money yet. What does it really take? Even more importantly, how long does it take and how much does it cost? Isn't that what you really want to know?

The problem with this question is that there isn't a black and white answer. It's not like you can spend $500 and you will definitely get a specific result. For some reason though that's how people think it works.

A lot of folks buy this or that "how to" product and think it's going to magically make them money. The key ingredient to making money from these products you buy is to take action and do what they tell you to do.

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In this article we will highlight some effective steps you can take to shift control back to your own business.

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